The General Services Administration (GSA) has released the final request for proposals (RFPs) for procuring billions of commercial satellite communications for both civilian and defense agencies.

The RFPs, one of which is full and open and another for small businesses, are to provide Custom Satcom Solutions (CS2) — end-to-end satellite services available as part of the Future Comsatcom Services Acquisition Program (FCSA). The combined RFPs could result in more than $5 billion in purchases.

FCSA is a recent agreement with the Defense Information Systems Agency (DISA) through which the GSA manages the purchase of satellite services for federal agencies. The Department of Defense (DoD) also purchases services through the program.

For the last decade, federal government customers have procured custom satcom services through a combination of vehicles from both the DISA and the GSA, according to the GSA Web site. However, the agencies thought that with multiple contracts expiring in the 2011-2012 time frame, they should come up with a joint acquisition strategy.

The idea behind combining the purchases for the two agencies is to avoid any redundant acquisition costs. Officials also wanted to create a common marketplace for vendors to offer their services.

Over 300 business people attended the Emergency Response Contracting Conference on June 21st, co-hosted by the Georgia Tech Procurement Assistance Center (GTPAC) and the Federal Emergency Management Agency (FEMA).

Whether or not you were able to attend, the good news is this: Complete proceedings from this conference are now posted on GTPAC’s website!

• a photo slide show,
• a video of all presentations,
• a set of all PowerPoint presentations,
• points-of-contact with participating agencies, and
• a list of all conference participants.

The conference focused on the products and services purchased by federal and state agencies in response to emergency situations in the southeast region. The agencies include FEMA, the Georgia Emergency Management Agency (GEMA) though the Georgia Dept. of Administrative Services (GA DOAS), the U.S. Army Corps of Engineers (USACE), and the General Services Administration (GSA). Information about doing business with several federal contractors also was included.

For those businesses interested in participating in this category of government contracting, the new resources posted on GTPAC’s website should prove to be informative and helpful.

Georgia businesses needing follow-up assistance should contact the nearest GTPAC Counselor. All contact information may be found at http://gtpac.org/team-directory.

The General Services Administration should rely more on electronic tools to reduce the number of mistakes and unauthorized approvals in its Multiple Award Schedule contracts, the agency’s inspector general said.

According to a report released this month, weaknesses in oversight of the contracting process at the Integrated Technology Services’ Center for Information Technology Schedules Program have led to errors in the award and modification of Multiple Award Schedule contracts. In fiscal 2009, the center was responsible for more than 5,400 MAS contracts worth more than $15 billion.

GSA has two applications that can check if contracts are following the proper procedures as they move through the many steps to award. The agency can use eOffer and eMod, which are Web-based systems that let vendors electronically submit contract offers and modifications. The inspector general found that GSA uses the applications in less than 30 percent of contracting actions.

The tools offer an automated, controlled process for completing contract documents not found in the paper-based process, the inspector general found. For example, vendors and contracting officers must review and digitally sign files in eOffer before the award process can move forward, which ensures that documents haven’t been overlooked. EMod, which feeds revisions back to GSA’s electronic procurement tools, will accept digital signatures only from the contracting officer and the vendor’s official negotiators, preventing unauthorized contract specialists from activating changes.

But auditors found contract specialists can input and change award information — and possibly introduce errors — without the approval of a contracting officer. GSA should integrate stronger access controls as it rolls out its systems modernization, which is scheduled for completion in fiscal 2015, the report concluded.

Larry Allen, president of the Coalition for Government Procurement, said inconsistencies in senior leadership and an increasing workload have affected management at the IT center. ITS Assistant Commissioner Ed O’Hare has asked for resources to address the problems, he added.

“The findings of this report aren’t necessarily solely indicative of rank-and-file people at the IT center not hitting their marks,” Allen said. Many contracting personnel aren’t comfortable with the new technologies, and more training will be required to familiarize them with the systems, he added.

“Part of the problem here is driven by past IG reports that have found problems but have not done a great job of offering explanations,” Allen said. “There’s some due diligence the IG needs to do in terms of the effects its findings have on behavior at the [IT center].”

In comments submitted to the inspector general, Federal Acquisition Service acting Commissioner Steve Kempf agreed with the report’s findings.

On Wednesday, June 9, United States District Court Judge William Alsup denied the American Small Business League’s (ASBL) motion for a preliminary injunction against the General Services Administration (GSA). The ASBL originally filed the motion in response to GSA actions to remove information from the federal government’s contracting database. Historically, the information has been used to uncover billions of dollars in small business contracts flowing to Fortune 500 firms. (http://www.asbl.com/documents/order_Denying_prelim.pdf)

Investigations by the Small Business Administration Office of Inspector General (SBA IG), U.S. Government Accountability Office (U.S. GAO) and inspector generals from a series of other federal agencies have used the field, “small business flag,” to identify large companies masquerading as small businesses to receive federal contracts. Since 2003, these investigations have uncovered billions of dollars in federal small business contracts actually ending up in the hands of Fortune 500 firms and some of the largest businesses in Europe and Asia. The most recent data released by the government indicates that the recipients of federal small business contracts include: Lockheed Martin, Boeing, Raytheon, General Dynamics, Ssangyong Corporation headquartered in South Korea, and the Italian firm Finmeccanica SpA. (http://www.asbl.com/documents/20090825TopSmallBusinessContractors2008.pdf)

In response to the court’s ruling, the ASBL announced it intends to pursue a permanent injunction against the GSA to prevent the destruction of the field on all future and historical data available to the public. In the court’s ruling, Alsup stated, “In the present action, plaintiff has not shown that the deletion of the search fields was a significant revision. Nevertheless, it should be given opportunity to do so by obtaining discovery on the pedigree of the change.” In accordance with Alsup’s ruling, the ASBL reportedly plans to subpoena emails and other materials within the GSA. The ASBL believes the information will show that the destruction of the “small business flag” was in fact a “significant revision,” in that it will make it difficult, if not impossible, for federal investigators to uncover billions in fraud and abuse in small business contracting programs.

Federal contracting officials can save nearly $200 million during the next four years by buying office supplies through one of 12 new blanket purchase agreements, the General Services Administration said on Wednesday.

The agreements — essentially charge accounts set up with certain companies — will help agencies meet the Obama administration’s goal of cutting contract spending by 7 percent by fiscal 2011, according to GSA officials.

The 12 agreements use strategic sourcing to consolidate purchases and leverage the government’s buying power. GSA said the pricing structure would save government buyers $48 million annually or $192 million over the life of the agreement. Agencies could spend as much as $800 million through the agreements during the next four years.

“These agreements show how [the Federal Acquisition Service’s] skillful negotiations can, and do, leverage the buying power on behalf of agencies governmentwide,” said Steven Kempf, acting commissioner of GSA’s Federal Acquisition Service. “The expertise and care the contracting team displayed have driven the prices down and opened doors for sustainable technologies and environmentally preferable products, while providing substantial opportunities for small business.”

According to the request for proposals, issued in March, a formalized commodity team, made up of officials from more than a dozen agencies, helped establish the agreements’ requirements. Many of those agencies have made funding commitments to use the agreements, the document said.

“Some participating agencies currently have established agency-specific vehicles for the purchase of office supplies with advantageous pricing,” the RFQ stated. “The aggregate participation of these and other agencies should result in pricing that is more competitive than that which a single agency can achieve. To this end, the contractor is strongly encouraged to offer BPA prices that are lower than pricing offered to any other federal government agency.”

The agreements are divided into three pools of companies offering office supply catalogs. The first pool is composed of seven small businesses, the second includes two companies that are focused on price and the third consists of three service-disabled veteran-owned small businesses offering discounted prices on toner catalogs. Each of the pools emphasizes price and sustainable or environmentally friendly products.

Daniel Gordon, the administrator of federal procurement policy at the Office of Management and Budget, lauded the purchasing structure.

“The agency is doing a very good job in balancing our commitment to low prices with our commitment to smoothing the path to the federal marketplace for small businesses and service-disabled veteran-owned small businesses,” Gordon said during a recent interview with Government Executive.

The agreements have other unique features, Gordon said. Unlike most BPAs, which are available only to a few agencies, they will be open governmentwide and available to all federal employees, he said.

“If you are a federal employee and you go into the winning vendor’s store, you give them your federal purchasing card and you will automatically get these prices,” Gordon said.

Over the years, contracting officers have exhibited a promiscuous tendency to include non-Schedule items in GSA Schedule purchases.

The many GSA Schedule procurements seeking $10,000 in Schedule items and $50,000 in non-Schedule “incidental” items did not go unnoticed by the OIG. The primary concern being that those $50,000 items should be properly competed – something that many agencies sought to avoid through their use of the Schedules program.

More technically, the Court and the GAO ruled that the non-Schedule portion of a GSA Schedule order had to meet the same competition requirements that would have applied had the purchase been made outside of the Schedule context. In other words, if the Government wanted to add non-Schedule items to its Schedule purchase, it had to hold a competition – unless the non-Schedule items were below the micro-purchase (since there are no competition requirements for such purchases).

In March of this year, we learned that the GAO’s vigilance continues apace. On March 15, 2010, the GAO issued its decision in Rapiscan Systems, Inc., B-401773.2, the latest in this long line of Schedule/non-Schedule cases. The case re-enforces the GAO’s view that the GSA Schedules program was not intended to shield the purchase of non-Schedule items from the FAR’s competition requirements.

But Rapiscan went one step further than prior cases in that it provides significant insight into how the GAO views the micro-purchase threshold (currently set at $3,000) – that is, the dollar value at which the Government’s competition rules fully kick in. Rapiscan involved a GSA Schedule procurement conducted by the Department of State for the purchase of gamma ray vehicle and cargo inspection systems. The solicitation (a Request for Quotations, or “RFQ”) limited participation to GSA Schedule vendors. Following award, Rapiscan Systems, Inc. (which did not win, obviously) challenged the award decision before the GAO. Rapiscan contended that the DOS improperly issued the purchase order to a contractor that did not offer every one of its items on its GSA Schedule.

Specifically, Rapiscan argued that the awardee did not offer freight on its Schedule Contract. In response to the protest, the Agency argued that the purchase of freight in this instance was permissible because it fell under the micro-purchase threshold.

The facts at this point, however, get a bit complicated – and very relevant. In its initial quotation, the awardee showed freight as an “open market” item, with a line item price of $6,832 – a sum above the micro-purchase threshold, obviously. In its revised quotation, however, the awardee discounted the freight charge by 100% – to $0. Accordingly, the Agency contended that the purchase of freight was permissible through a GSA Schedule procurement. The awardee, however, also had stated in its revised quotation that the price for freight was “included in the unit price of” the primary Schedule item being purchased – a quite common turn of phrase among Government contractors.

This language, however, coupled with the fact that the awardee had a price for freight in its initial proposal that was above $3,000, clearly concerned the GAO. Indeed, it led the GAO to conclude that the awardee’s $0 price for freight was “illusory.” In GAO’s view, it was no more than the “shifting of the initially quoted price” between line items. Having found the “real” price of freight to exceed the micro-purchase threshold, it was not a far leap to sustain the protest. According to the GAO, the “micro-purchase exception is a narrow one and was not intended as a means for vendors to provide non-FSS items as micro-purchase items . . . .”

Interestingly, there is much in the decision to suggest that the GAO would have come down differently had the awardee not stated that it “included the price” of freight elsewhere in its proposal. Finding evidence of a greater-than-$3,000 price for the non-Schedule item, however, the GAO was boxed in by its prior case law. The GAO’s Rapiscan decision obviously supports the long-standing general rule that non-Schedule products may not be procured through GSA Schedule procedures. But it also demonstrates how the GAO will read between the lines (or line items, in this case) when assessing the price of a non-Schedule item.

The lesson here? We offer two. First, when offering a non-Schedule item in a Schedule procurement, keep it “micro.” Second, to paraphrase an ancient Buddhist proverb, “whatever words we utter, should be chosen with care.”

The General Services Administration needs better data collection methods to improve the pricing and performance of its Multiple Award Schedules program, according to an oversight audit.

The Government Accountability Office report released on Monday found that limitations with GSA’s two electronic procurement tools, e-Buy and GSA Advantage, hinder the agency’s ability to collect data about purchases under the schedules program. For example, GSA Advantage is used to procure goods but not services. E-Buy can be used for requests for proposals of any size but cannot process orders greater than $3,000. In addition, because agencies can place orders directly with multiple award schedule vendors, GSA Advantage accounted for only 1.5 percent of sales in 2008.

In comments on the report, GSA said because of the tools’ limitations, customer agencies and vendors control purchase information, making it difficult for GSA to aggregate and evaluate trends.

The Multiple Award Schedules program — government’s largest interagency contracting initiative — recently has come under fire for not meeting customers’ needs. The Multiple Award Schedules Advisory Panel, comprised of representatives from both government and industry, in March published a list of 20 recommendations to improve the program.

According to Alan Chvotkin, a panel member and executive vice president and counsel at the Professional Services Council, a contractor trade association, the schedules program has evolved from offering commodities to providing solutions and services, and the pricing methodologies might not suit what agencies are buying today. The panel recommended GSA remove from supply and services contracts the price reduction clause, which states if a vendor lowers prices for its target customer, then it also must do so for government. Solutions contracts already are free of this clause and should remain that way, the panel said.

But the GAO audit suggested GSA proceed with caution on the advisory panel’s assertions. For example, GAO found GSA lacks data to support the panel’s assessment that the price reduction clause rarely is used. Without good information, GSA cannot determine how the Multiple Award Schedule program serves customers’ needs, evaluate program performance or negotiate best prices, the report found.

“Our prior work has highlighted the importance of having comprehensive spend data as part of a successful approach to procurement, noting that the use of procurement data to determine how much is being spent for goods and services and to identify buyers and suppliers can identify opportunities to leverage buying, save money and improve performance,” GAO wrote. The audit recommended GSA expand its use of electronic purchasing tools or launch a pilot data collection program.

“To improve the system, the [Obama] administration must collect better data on these contracts and use it to ensure the mission requirements of federal agencies are met in a timely, cost-effective manner,” said Sen. Susan Collins, R-Maine, in a statement. “The Office of Federal Procurement Policy and the General Services Administration must take aggressive and coordinated action to address GAO’s recommendations and help ensure that taxpayer dollars are used wisely.”

Federal agencies spend about $60 billion a year on interagency and enterprisewide contracts, but there is limited evidence that they are being effectively used and managed, according to a new report from the Government Accountability Office.

Agencies use multiple-award schedule contracts, multiagency contracts, governmentwide acquisition contracts and enterprisewide contracts to buy a wide range of goods and services. The bill for such contracts was estimated at $60 billion in fiscal 2008, but the total was unknown because the total number of contract was unknown, GAO said in the report dated May 24.

“The total number of multiple-award contracts and enterprisewide contracts currently in use by agencies is unknown because the federal government’s official procurement database, [the] Federal Procurement Data System-Next Generation, is not sufficiently reliable for identifying these contracts,” the GAO report stated. “This has been a longstanding problem.”

Furthermore, there is limited data to show the effectiveness of these types of contracting, GAO added. And without greater coordination and oversight, it is unclear whether the interagency and enterprisewide contracts are effective in leveraging buying power, and the proliferation of such contracts suggests there may be fewer efficiencies and less cost savings than expected in their use, GAO added.

There are concerns about duplication, lack of information, pricing and management. “Data are lacking and there is limited governmentwide policy to effectively leverage, manage, and oversee these contracts,” the GAO wrote.

Duplication of products and services offered on multiple acquisition vehicles has created uncertainty about best pricing. For example, with the General Services Administration’s multiple-award schedule program, there are tools and controls to obtain best prices, but it is not clear whether those tools are achieving that goal, GAO continued.

“A lack of data, decentralized management, and limitations in assessment tools create challenges for GSA in managing the multiple-award-schedule program,” the report said.

GAO makes recommendations to the Office of Management and Budget to strengthen policy, improve data and better coordinate agencies’ awards of multiple-award contracts and enterprisewide contracts. It also recommended to GSA to improve pricing and management of the multiple-award schedule program. Both agencies agreed with the recommendations.

— Published May 25, 2010 – About the Author: Alice Lipowicz is a staff writer for Federal Computer Week.

GAO denied a protest by Perot Systems Government Services, Inc. (Perot) finding that the contracting officer properly rejected Perot’s proposal that contained labor rates not yet approved by the General Services Administration (GSA) [Perot Systems Government Services, Inc., B-402138, Jan. 21, 2010]. Rejecting several arguments from Perot as to why the rates in its proposal were fair and reasonable, GAO held: “vendors under FSS purchases must quote schedule prices that are published and that have been determined to be fair and reasonable by GSA.” GAO noted that the only exception to this rule was for additional discounts offered from approved GSA prices.

The Procurement

GSA sought bids from contractors holding Federal Supply Schedule (FSS) Schedule 70 contracts for certain professional services. At the time it submitted its proposal, Perot was in the process of negotiating a five-year extension of its Schedule 70 contract. Perot had proposed new labor rates for the five-year extension, but those rates had not yet been approved by the GSA contracting officer. In its proposal, Perot use its proposed, but unapproved labor rates. The contracting officer excluded Perot’s proposal from consideration because the labor rates included in the proposal did not match Perot’s current Schedule 70 contract labor rates.

Approved GSA Prices Are A “Cap” On Prices

Perot raised several arguments as to why its new, but unapproved, rates were fair and reasonable. First, Perot argued that the RFQ required that a contractor’s approved rates be “derived from” its GSA Schedule rates, and its proposed rates were, in fact, “derived from” its GSA Schedule rates. Second, Perot argued that even though a few of its proposed rates had increased slightly, the majority of its rates were lower. Finally, Perot argued that its rates were fair and reasonable because its overall price was lower than the awardee’s price. GAO rejected each of these arguments. Relying on FAR 8.404(d), GAO found that even if the lower rates proposed by Perot could be considered a discount from its current rates, the categories for which higher rates were proposed were improper. Thus, the contracting officer correctly eliminated Perot’s proposal as unacceptable.

Lesson Learned

Approved GSA schedule rates are a ceiling when bidding on task orders issued under FSS contracts. Contractors should take care to make sure that prices offered are approved GSA Schedule prices or lower. Not only may proposing prices higher than those approved by GSA result in rejection of a bid, it also could result in allegations of overcharging in the event of a later audit by the GSA Inspector General. Thus, GSA contractors should make sure that federal sales personnel and any authorized dealers permitted to sell under the contractor’s GSA contract are adequately trained in this subject.

– May 10, 2010 by Sheila Armstrong – K&L Gates LLP – This blog/Web site is made available by the contributing lawyers or law firm publisher solely for educational purposes to provide general information about general legal principles and not to provide specific legal advice applicable to any particular circumstance. By using this blog/Web site, you understand that there is no attorney client relationship intended or formed between you and the blog/Web site publisher or any contributing lawyer. The blog/Web site should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

The General Services Administration is calling on the federal government to eliminate its environmental impact through green technology and smarter acquisition decisions, agency officials said on Wednesday.

“GSA has to embrace a zero environmental footprint goal. We should set our sights on eliminating the impact of the federal government on our natural environment,” said GSA Administrator Martha Johnson during a speech on Wednesday evening. “This is our moon shot.”

In an earlier conference call with reporters, Johnson said a zero footprint is a big strategic idea that hasn’t yet been translated into specific programs. But, she added, the agency aims to build leadership around sustainability, develop across-the-board training and awareness and attract young professionals who relate to the mission.

“The first thing you start quibbling about is, ‘What does it mean, how do we know it, where do we start measuring, how will we get the biggest bang for the buck?’ ” she said. “We want to have those kinds of conversations.”

When it comes to green technology, government needs to look at the whole IT life cycle to identify energy-saving solutions, Johnson said. For example, data center consolidation, smart building technology, virtual workplaces and reduced computing power all offer ways to build sustainability.

“It also invites the issue of employee culture. We can put in all kinds of dials and switches, but there is behavior that comes along with it, and we need to engage everyone in that conversation,” she added.

GSA also is working to shore up its workforce, said Steve Kempf, acting commissioner of the Federal Acquisition Service. The agency must fill its vacant full-time positions to improve service to its customers and to relieve the burden on staff, he added. Specific initiatives include recruitment of mid-level career employees, an FAS internship program and opportunities to rotate through positions to build management and information technology skills.

The agency’s fiscal 2011 budget request includes $25 million for acquisition workforce initiatives, including improved training, a more careful accounting of workforce strengths and gaps, and a stronger community-building program for sharing best practices.

“This is a way for GSA to have its own moon shot,” said Johnson. “We’re both positioned and poised and ready and eager to play a more aggressive role in this.”